For Sale by Owner (FSBO) – Should you list on your own?
For Sale by Owner: Questions to Ask Yourself?
If you try to sell your property yourself…
For Sale by Owner: Topics to Consider
How much money are you really saving?
There are several factors to consider when estimating your net from the sale.
Typically For Sale by Owner properties are priced too high for the market. This has been seen in numerous studies. What this leads to is missing out on the critical first two weeks on the market. The first two weeks is when you will see the most visitors to your property. If it is priced to high, you will miss out on many qualified buyers. The longer your property sits on the market, the more stale it seems in a buyer’s eyes. Once you lower the price enough to sell, a buyer may ask themself, why has no one else wanted to buy this property yet? You may then have to lower the price even below what it would have sold for had it been priced right in the first two weeks.
Commission to showing agents is another price factor to consider. Typically a buyer’s agent will make 3% commission on the sale. If you are listing a property yourself and not paying a buyer’s agent commission, then those agents will not want to show your property to their client. In addition to that, even if you pay the buyer’s agent commission, many still don’t like to show FSBO properties, because it can lead to more work and complications for them to handle on the deal.
Also consider time to sell on the overall price. The time that it takes away from your work schedule and other responsibilities to take calls from buyers, qualify them, show the property, draw up contracts, negotiate with other agents and buyers etc.
Listing in the Multiple Listing Service (MLS)
When you list your property for sale with a Realtor, he/she will enter it into the Multiple Listing Service (MLS). This is a shared system that agents in the area all access to find available properties for their clients. If you try to sell your home, without adding it to the MLS system, you may not be found by agents representing buyers in the area.
Showings & Qualified Buyers
If you sell your property yourself, all of the work to show a property and qualify buyers lands on your shoulders. How do you know if someone who wants to tour your home is qualified to buy the property? Do you want to ask them or are you going to spend your time showing your home to people who may just be looking around?
For showing appointments are you going to have to take off work or be able to change your schedule at short notice to show your home to a prospective buyer? In addition to that many buyers do not feel comfortable touring a property with the seller there and/or showing them around. When an agent shows your property there are also experienced with answering questions or handling buyer’s objections.
You’ll want to consider what type of marketing you’ll do on your own. How will you get your listing online? Do the sites charge a fee? Will you print flyers or run targeted mailings? Consider who will create your marketing pieces and how much it will cost to pay for them. Also consider how you will keep them updated. This also includes capturing the right pictures to entice buyers to come for an inside tour.
A Realtor provides a buffer between you and the buyer and buyer’s agents. This offers you a great advantage in negotiations. In addition to that experienced agents can highlight typical and/or special points in terms of the deal. Is it standard for buyer to request closing costs in this market? What is the regular amount? What things should be included in the purchase? When do you move out and they move it? Are the terms of the deal favorable to you? What are the inspection and financing issues? Experience in negotiating these factors all impact your bottom line and a smooth transition.
A person’s property is typically their biggest financial investment. It is important to consider legal aspects of the transaction and your interactions with buyer in order to protect your financial interests. You’ll need to consider disclosure topics, tax issues, restrictions with your homeowner’s association (if applicable) and others. Most states require a property condition disclosure of some type. Selling yourself does not preclude this responsibility. Most lawsuits pertaining to the sale of real property result from buyers suing regarding property conditions and or repairs that were not fully disclosed. Federal law requires that houses built before 1978 include a Lead Base Paint Disclosure with certain options for the buyer and seller. When you go it alone, there is a greater risk that you may miss something in these areas.
Do the Research: Interview an Agent
Schedule an interview with an agent to have a greater understanding of your current real estate market and issues regarding the sale. You are not obligated to use the agent. We offer complimentary appointments to evaluate your property and let you know about our services and you’ll be able to make a more informed decision.